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Ericsson Newbie Eyes SPIT, TV Growth

Michelle Donegan
News Analysis
Michelle Donegan
6/7/2011
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Ericsson AB (Nasdaq: ERIC) has finally found the right man to lead its Multimedia business unit, and his name is Per Borgklint.

Effective from Tuesday, Borgklint joins Ericsson as senior vice president and head of business unit Multimedia, a position which has been vacant since Jan. 1 this year when his predecessor, Jan Wareby, moved on to become the company's head of sales and marketing.

Borgklint is best known among European operators and broadcasters. Before joining Ericsson, he was CEO of the Swedish operator Net1. Previously, he was CEO of pay-TV broadcaster Canal Plus Nordic. He was also CEO of Dutch operator Versatel Telecom International N.V. (Pink Sheets: VRSAF) and has held several positions at Tele2 AB (Nasdaq: TLTO).

So he's a CEO kinda guy with a fresh perspective for the vendor.

"I have a very good understanding of what customers are looking for and what kinds of solutions are required," Borgklint tells Light Reading Mobile.

Well, that ought to come in handy as he takes charge of Ericsson's smallest business unit in terms of revenue: First-quarter sales for the unit were SEK2.3 billion (US$374 million), just 4.3 percent of Ericsson's total first-quarter sales of SEK53 billion ($8.6 billion).

So what does Borgklint have in his Multimedia domain? The group houses three product areas: operation support systems (OSS)/business support systems (BSS), so some key Service Provider Information Technology (SPIT) assets; TV systems; and consumer and business applications. (See The SPIT Manifesto.)

Borgklint says his priority will be to focus on the OSS/BSS and TV assets to create top-line growth. As for the application and service creation area, Borgklint says those activities needed to be reviewed.

"We'll continue to develop the applications side, but based on a more structured approach," he says. "Some things need to be changed."

But he does not specify what or how things might change for that part of the multimedia business.

Why this matters
Borgklint's career history with operators and broadcasters will bring a fresh outlook to two key areas that Ericsson hopes are big growth opportunities -- namely, OSS/BSS and TV. Within those segments, Ericsson points to revenue management, video compression and IPTV headends as its strong points in terms of market traction.

While this is Ericsson's smallest business, it is clearly strategically important, given Ericsson's long-standing emphasis on the potential of IPTV and the recent increased focus on the vendor's OSS/BSS assets, about which it was shouting louder than ever at the recent Management World 2011 event in Dublin. At that event, Ericsson staffers were talking about aiming to be a top-five OSS/BSS supplier globally within a few years.

With those sort of aspirations, and a clear focus from other members of the senior management team on growing the Multimedia business, Ericsson is looking for this mainly software-focused unit to deliver tangible growth. (See Ericsson's New CMO Has a Soft Side.)

It'll also be interesting to see what changes are in store for the vendor's consumer and business applications activities within this unit. Offerings such as messaging, service delivery systems or location-based services will be put under the microscope, Borgklint's comments suggest.

For more
Ericsson has been beefing up both its SPIT and TV credentials lately:



— Michelle Donegan, European Editor, Light Reading Mobile

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